Clare Valley Water Supply

I seek leave to make an explanation before directing a question to the Minister for Water regarding the Clare Valley Water Supply Scheme and the Clare Region Winegrape Growers Association.

The Hon. J.M.A. LENSINK: The Clare Valley region relies on the Clare Valley Water Supply Scheme (CVWSS), which was developed in 2004 to provide irrigation water to that region and also to augment the Swan Reach-Paskeville pipeline and provide reticulated water to townships surrounding Clare. The Clare Region Winegrape Growers Association supported the development of the CVWSS through the provision of over $2 million to the scheme. At the time the scheme was developed, the price of water was $970 a megalitre.

Water prices have increased, thanks to the desalination plant, by 250 per cent since the scheme has been in operation, with prices this year reaching $3,500 a megalitre for the 2012-13 growing season, while at the same time the average price per tonne for wine grapes has been decreasing. One-third of the grape growers rely on the CVWSS to provide access to good quality reliable supplies for irrigation water due to insufficient surface water capacity, with groundwater resources predominantly being saline or low yielding. Growers have been placed under significant pressure as a result of price increases.

In early 2013, an agreement was reached with SA Water for the supply of water to the region being priced at the off-peak transportation cost due to the high water use and extremely dry conditions during the growing season. The passage of the Water Industry Act was to signal the levelling of the playing field between SA Water's monopoly position and other new providers into our state's water market. My question for the minister is: will SA Water consider providing the Clare Region Winegrape Growers Association with a similar arrangement for the 2013-14 growing season, and on an ongoing basis, such that they will charge only for the transportation costs?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (14:33): I thank the honourable member for her most important question. Whether you live in Clare or Adelaide or McLaren Vale or the Riverland, everyone pays the same price for water per kilolitre for the water that SA Water supplies. This is regardless of the cost of supplying—

Members interjecting:

The PRESIDENT: The minister has the call.

The Hon. I.K. HUNTER: This is regardless of the cost of supplying that water. This is the policy of the state government. The system is considered the fairest way to spread the cost of providing and maintaining basic water facilities across the community. The $34.8 million Clare Valley Water Supply Scheme was completed in late 2004. The primary objective of the scheme was to provide for long-term sustainable irrigation while delivering economic benefits to the region. The scheme also provided potable water to townships in the Clare Valley region and enabled bulk water to be transferred from the Morgan-Whyalla pipeline to the Swan Reach-Paskeville pipeline to support Yorke Peninsula.

The scheme delivers water during peak periods at statewide prices and off-peak transportation of water for irrigators who purchase their own licences. I am advised that each customer made an up-front capital contribution to the scheme infrastructure costs based on their contracted volume at a rate of $1,500 per megalitre, or $1.50 per kilolitre.

I am advised that SA Water offers an off-peak water transportation service where the customer can utilise SA Water's infrastructure to transport water to their property. These customers hold a River Murray water licence. Ordinarily the off-peak water transportation supply season operates from 1 April—in some cases, for operational reasons, 1 May—to 31 October each year.

In response to the honourable member's last question about next season and ongoing, I am advised that SA Water is not in a position to make a decision in relation to any special arrangements that may be offered next summer. Any decision will have careful consideration, taking into account many factors, particularly the climate.

The Hon. J.M.A. LENSINK (14:35): I have a supplementary question. Can the minister advise when SA Water will be in a position to make that decision?

The Hon. I.K. HUNTER (Minister for Sustainability, Environment and Conservation, Minister for Water and the River Murray, Minister for Aboriginal Affairs and Reconciliation) (14:36): I am sure it will be in a position to make that decision once these factors that I have mentioned have been taken into account.